Fixed Deposits in Singapore

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“Interest rates: Choose your fixed deposit account wisely; it can make a huge difference to your savings. Shop around for best fixed deposit rates available in the market for the amount that you intend to invest and the tenure for which you plan to invest. Interest rates may vary from bank.”

Fixed Deposit (FD) Singapore

A Fixed Deposit is a type of low risk investment opportunity on which you will earn a predetermined fixed rate of interest. Fixed deposits in Singapore are also referred to as Time Deposits. Fixed deposit interest rates can change from time to time, depending on the bank. Many banks in Singapore offer fixed deposit promotions to customers wherein you will earn a higher rate of interest for the duration of the promotion.

A fixed deposit account can be opened by depositing a fixed amount into the account for a definite period of time. You must note that when opening a fixed deposit account, you can deposit money only once. The interest earned on the fixed deposit will be payable only upon maturity.

You can use your fixed deposit as collateral to apply for other lines of credit such as loans, credit cards, etc. Many banks in Singapore offer automatic renewal of your fixed deposit account upon maturity so you don’t have to worry about reopening the account.

Why choose a fixed deposit?

When compared to a savings account, a fixed deposit yields higher interest rates. It can also help cultivate saving habits because once you deposit the money into a fixed deposit, you cannot typically withdraw it. Premature withdrawals of fixed deposits will cost a penalty and you will forfeit the interest rate offered.

Fixed deposits are very low risk investments. As the interest rate earnings on fixed deposits are fixed before you open the account, they will not be affected by market fluctuations. At the end of the maturity period, you will get your initial deposit + interest. Fixed deposits are more reliable than other market investments such as stocks, shares, bonds, etc.

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Best Singapore Dollar Time Deposit Rates

Here are fixed deposit interest rates offered on a minimum placement amount of S$5,000 for a tenure of 12 months:

Bank

Interest Rate

HSBC Singapore Dollar Time Deposit Rate

0.25% p.a.

Maybank Singapore Dollar Time Deposit

0.70% p.a.

OCBC SGD Time Deposit

0.25% p.a.

DBS S$ Fixed Deposit

0.35% p.a.

UOB Singapore Dollar Time Deposit

0.25% p.a.

CIMB SGD Fixed Deposit

0.70% p.a.

Standard Chartered SGD Time Deposit

0.35% p.a.

POSB S$ Fixed Deposit

0.35% p.a.

RHB SGD Fixed Deposit

0.45% p.a.

Bank of China (BOC) Time Deposit

0.60% p.a.

Citibank SGD Time Deposit (minimum placement amount of S$10,000)

0.10% p.a.

Hong Leong Finance (HLF) Fixed Deposit

0.45% p.a.

Features and benefits of Fixed Deposits

Features of fixed deposits:

Fixed deposit tenures in Singapore start from 1 week and extend up to 36 months.

The minimum placement amount for most banks in Singapore is S$5,000. Citibank, however, requires you to deposit a minimum amount of S$10,000 to open a fixed deposit account.

Interest on fixed deposits is earned on a yearly basis (per annum).

You can open more than one fixed deposit account simultaneously.

Benefits of fixed deposits:

Fixed deposits offer guaranteed returns.

Fixed deposits are low risk investments.

Fixed deposits can be used as collateral to apply for other lines of credit.

You get to decide how long you want to save your money in a fixed deposit account.

Time Deposit Schemes offered by banks

Maybank Fixed Deposit/Time Deposits

Maybank offers a choice of 6 fixed deposit accounts including Singapore Dollar Fixed Deposits and Foreign Currency Fixed Deposit accounts. You can choose tenures starting from 1 month and up to 36 months. The minimum deposit to open a Maybank fixed deposit starts at S$1,000.

Regular FD:

Singapore Dollar Privilege Plus Time Deposit:

Choose a minimum deposit amount of at least S$25,000 for a tenure of minimum 12 months or at least S$50,000 for a tenure of minimum 6 months.

Minimum age – 55 years old.

You will earn an additional interest of 0.25% p.a. above the prevailing board rates.

UOB Fixed Deposits

UOB offers a choice of two fixed deposit accounts; Singapore Dollar and Foreign Currency Fixed Deposit accounts. The bank offers promotional interest rates on both accounts from time to time. Tenures are as low as 1 week and extend up to 36 months.

You won’t get any interest for deposits in Euro, Swiss Franc and Japanese Yen.

CIMB Fixed Deposit

CIMB is one of the few banks in Singapore that offers both, conventional as well as Islamic Banking Fixed Deposit accounts. You have the option to choose from three different types of fixed deposits offered with minimum placement amount starting from S$1,000. Promotional interest rates are offered from time to time.

Foreign Currency FD:

Foreign Currency Fixed Deposit Account:

Choose from the following currencies - Euro (EUR), British Pound (GBP), United States Dollar (USD), Australian Dollar (AUD), New Zealand Dollar (NZD), Canadian Dollar (CAD) and Renminbi Offshore (CNH).

Minimum placement amount – 10,000 units.

Placement tenures of 1 month, 3 months, 6 months and 12 months.

Automatic renewal upon maturity is available.

Interest rates offered range from 0% to 2.515% p.a.

For the month of August, you can get a promotional interest rate up to 2.39% p.a. on Foreign Currency Fixed Deposit of 20,000 units for a period of 1 year.

Islamic FD:

Why Wait Fixed Deposit-i Account:

This is a Shariah compliant FD account that is based on the Murabahah concept.

You will receive your returns upfront in the form of a profit without having to wait for your FD to mature.

Minimum placement amount is S$1,000.

Up to August 15, 2017, CIMB is offering promotional interest of up to 1.08% p.a. (for 6 months) and 1.18% p.a. for 1 year. You need to deposit at least S$20,000 to benefit from this promotion.

Standard Chartered Fixed Deposit

Standard Chartered offers a choice of two fixed deposit accounts with preferential interest rates for Priority Banking customers. The bank also offers additional features such as consolidated statements, phone banking and SC online banking services.

Minimum placement amount – 5,000 units. For RMB, you need to have at least an equivalent of S$50,000 for foreign exchange conversion. Once the amount is converted to RMB, you can make multiple deposits of the same or different tenures with the equivalent of S$5,000.

Hong Leong Fixed Deposit

Hong Leong Finance is currently one of the few banks in Singapore that offers special interest rates to senior citizen applicants. The bank also requires the lowest minimum placement amount across the island.

Hong Leong Fixed Deposit:

Deposit tenures start from 1 week and extend up to 36 months.

Minimum deposit of S$500 for deposit tenures between 3 months and 36 months.

Minimum deposit of S$10,000 for deposit tenures of 1 month and 2 months.

Minimum deposit of S$100,000 for deposit tenure of 1 week.

Interest rates offered start from 0.10% p.a. up to 1.30% p.a.

Senior citizens will enjoy a bonus interest rate of 0.125% p.a. for tenures of 12 months and above.

Corporate or Company Fixed Deposits

Corporate Fixed Deposits or Company Fixed Deposits are the type of deposits that are accepted by several financial institutions. Corporate Fixed Deposits are very similar to bank fixed deposits. They also have interest rates and a fixed tenure. Corporate Fixed Deposits generally offer interest rates that are much higher than the regular fixed deposits of banks. They are also a much riskier investment when compared to a personal fixed deposit.

Under the schemes of Corporate Fixed Deposits, customers choose to deposit a particular sum of money with a certain company for a fixed tenure. The rate of interest remains fixed until the maturity period is reached. At the end of the holding period, the customers not only receive principal amount in return, but also, huge payouts as interests. The tenure of deposits can vary from 6 months to 7 years. Deposit certificates stating several important details including maturity date, interest rate, tenure, etc. are issued to the deposit holders by the companies. The interest that is earned on the company fixed deposits is taxable.

Company Fixed Deposits are not guaranteed at all in case of default. Different agencies like ICRA and CRISIL award rating points to companies and their fixed deposit schemes. The frequency of compounding interest may vary. It could be annually, semi-annually, quarterly or monthly basis.

Foreign Currency Fixed Deposit Schemes

You can invest in a fixed deposit with over 10 different foreign currencies accepted by majority of banks in Singapore. Some foreign currencies earn higher interest rates than others. There are foreign currencies that do not earn any interest no matter which tenure you have chosen, making them just a savings option rather than an investment. Also, the longer tenure you choose, the higher will be your return on investment.

Advantages of Fixed Deposits

It is the safest investment to make and carries the least amount of risk when compared to other investment options.

It encourages and cultivates saving habits. The money in your fixed deposit account cannot be withdrawn for a particular tenure.

You know exactly how much return on investment you are getting as the interest rate is predetermined and fixed.

Interest rate may be paid monthly, annually or upon maturity, depending on the deposit tenure you have chosen.

You get to decide for how long you want to save your money. Fixed deposit tenures in Singapore range as low as 1 week and up to 60 months.

Fixed deposits are liquid assets; therefore you can prematurely withdraw your savings after a particular tenure. Depending on when you make the withdrawal, you will be entitled to an interest on a prorated basis.

You can hold more than 1 fixed deposit at the same time.

Loan against Fixed Deposit

If you are in need of funds for a small period of time, you can apply for a loan against your fixed deposit account, depending on the bank. When in need of money, people either prematurely liquidate a fixed deposit or go for personal loans. Personal loans can come with heavy interest rates and there are charges and penalty for prematurely liquidating a fixed deposit. Therefore, it is advisable to go for a loan against a fixed deposit as the rate of interest charged is lesser than the interest rate charged on personal loans.

The amount of loan granted against a fixed deposit can be up to 90% of the total amount deposited in the FD account of the bank. However, beware that your loan term cannot exceed the tenure of the fixed deposit.

Income Tax on Fixed Deposit

The interest earned on your fixed deposit amount is not tax free. Just like how the tax slab for different people is different, similarly, the tax calculation on fixed deposits also varies depending upon the amount earned by the individual in that year.

Fixed Deposit Eligibility

Singapore citizens, Permanent Residents and foreigners are eligible to open a fixed deposit account.

The minimum age to open a Singapore Dollar Fixed Deposit usually starts from 12 years onwards. However, applicants below the age of 18 must be accompanied by parents/legal guardians.

While some banks impose a maximum age of 55 years to open a fixed deposit account in Singapore, other banks such as Hong Leong bank offer bonus interest rates to senior citizens above the age of 55 years.

Fixed Deposit Maturity Amount

Upon the maturity of your fixed deposit, you will receive your principal placement amount/investment + the fixed rate of interest that was offered to you when you opened the FD account. The total of the principal placement amount together with the interest amount is called the maturity amount.

Leading banks in Singapore are now offering Fixed Deposit Calculators so interested candidates can calculate how much interest they will earn if they open an FD account with a particular bank. Details such as FD amount and tenure must be keyed in to calculate the interest you will earn on your FD account.

How to withdraw from your fixed deposit?

Some banks in Singapore allow you to prematurely withdraw your fixed deposit account by charging you with a penalty for the same. This could mean lower interest or no interest on your deposit amount depending on how early you withdraw your deposit. You must contact your bank if you wish to prematurely withdraw your fixed deposit.

Upon maturity, if you have provided a standing instruction to the bank to transfer your fixed deposit principal amount + interest into a bank account of your choice, the same will be done automatically. If you have not informed the bank regarding the transfer of your deposit, it may be automatically renewed for the same tenure or another tenure determined by the bank.

Premature Withdrawal Charges

Ideally, you should not withdraw your time or fixed deposits before they mature. But in certain circumstances like medical emergencies, you may be forced to do so. If you decide to do this, the bank may take steps to limit the interests payable to you depending on how soon you are pulling out the amount, besides imposing some penalties.

For instance, with banks like Maybank, no interest will be paid if the money is withdrawn within three months of making the deposit. Post three months, interests may be provided on the number of days you have deposited the money, calculated with the lowest level of existing savings account rates. Others like DBS may pay you interest on quarters completed in a calendar year.

Frequently Asked Questions on Fixed Deposit

What is the minimum amount needed to open a fixed deposit in Singapore?

The minimum amount to open a fixed deposit account in Singapore is S$500. This option is offered by Hong Leong.

What documents should I submit when opening a fixed deposit account in Singapore?

Singapore citizens and Permanent Residents must submit their NRIC. Foreigners must submit their Passport/Employment Pass/S Pass/Student Pass/Dependant's Pass. Address proof may be required.

Can I open a fixed deposit account as a joint account holder?

Yes. Fixed deposits can be opened solely or with a joint account holder.

Can I open a fixed deposit account online?

Yes. You can open a fixed deposit account online if the bank has online banking and offers this facility. For example, UOB allows for booking an online appointment for express fixed deposit account opening.

Do I have to pay tax for the interest that I gain from the fixed deposit account?

A. If you have created a fixed deposit account with a licensed financial institution or an approved bank, you do not have to pay tax.

Are fixed deposits better than Singapore Savings Bonds (SSB)?

A. Singapore Savings Bonds (SSB) also provide you a higher interest rate when you lock in the amount for a longer tenor, say 10 years. However, fixed deposits offer a choice of tenors and various interest rates. With regard to SSBs, the interest rates only increase with time.

A. This depends on the kind of term deposit you hold, and the bank. Certain specific FD accounts offered by banks in Singapore allow you to withdraw just the interest accumulated over the deposit period.

What is the Deposit Insurance Scheme?

A. Your deposit amount with recognised banks is more or less secured. By law, the Singapore Deposit Insurance Corporation (SDIC) insures the amount up to S$50,000 per depositor per scheme. This means that your deposits up to this amount will be returned to you even if the bank closes down or any financial problem occurs to it. This insurance is available on the total deposits you have with a particular participating bank, excluding the CPF deposit schemes, which are separately insured for up to S$50,000.

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News About Fixed Deposit

According to a PwC report, REITs and business trusts dominated the follow-on funding rounds last year in Singapore, raising almost S$2.43 billion or 81% of the total funding available. Transport sector was next on the list, capturing 7% of the share.

Citibank announces a new promotional offer on foreign currency time deposits. Depending on the foreign currency, the bank is offering interest rates of up to 1.70% p.a. for three-month time deposits and up to 1.50% p.a. for one-month time deposits.

The Monetary Authority of Singapore requires comments from Singapore-incorporated banks on the changes suggested to the regulatory framework for large exposures. The closing date for submission is February 12, 2018.

04th January 2018

What to Expect From the Singapore Monetary Policy October 2017

The Monetary Authority of Singapore (MAS) released the advance growth estimates and monetary policy decision for the third quarter on October 13. In the second semi-annual meeting this year, the MAS has decided to keep the appreciation rate of the Singapore dollar nominal effective exchange rate (S$NEER) policy band unchanged at 0%.

Since April 2016, MAS has not considered changing its policy stance. In the last meeting held in April, the central bank conveyed that the neutral stance is applicable for a longer period of time. Even with the subdued inflationary pressure, the MAS pursues at keeping the stance unchanged. After the April 2017 policy review, the Singapore economy has performed a little better versus the expectation, along with keeping the inflation well within the expectations.

The decision taken by the MAS was hugely impacted by Singapore’s economy as well as weak price pressures. The width and level at which the policy band will be centered remain unchanged. In 2018, it is likely that the Singapore economy will expand at a slightly slower pace in comparison to 2017.

The next meeting is to be held in the month of April 2018.

31st October 2017

Here’s what your financial planning should look like when you’re 40!

The fact that you’ve reached your 40s with a decent level of financial stability means that you’ve managed to get over the tumultuous financial times in your 20s, and maybe some distress in your 30s. Here are some financial planning tips for you to note when you’ve finally hit 40, for life once you turn takes a starkly different turn.

1. Having a good bank balance

One of the most important financial tips for people in their 30s is saving money. Having a good chunk of balance in your bank becomes necessary for you to take care of your daily expenses, which would have tripled since the time you were 20. Well, of course! You have your family to take care of now, don’t you? So bank balance, well, that’s the key.

2. A loan wouldn’t hurt

As long as you have a steady income, a loan wouldn’t really hurt. This is more to do with not disturbing your savings. Taking a loan to purchase a house or a car is an ideal financial tip at 40. Taking a personal loan, however, might not be the best option.

3. Clearing off a major chunk of your debt by the time you reach 40

Well, another tip worth noting is that you must make every effort to clear off a major portion of your debt by the time you are 40. This is because your day-to-day expenses would have tripled since the time you hit 30, and you might want to take a loan for your new home. When we refer to clearing off debt, we’re mostly referring to clearing off a personal loan or a credit card, or both.

4. Subscribe to a retirement plan

Last but not the least, make sure you’re investing in a good retirement plan. The importance of this tip cannot, at any point in time, be underestimated, for not doing so when the time is right (at 40) might well turn out to be distressful in the years to come.

06th October 2017

How to recognise a true “risk free” investment

While we all save and invest money in order to make it grow, there are certain things that is hindering that growth. Our tendency to invest in supposedly ‘risk free’ programmes like FD or CPF guarantees that we’ll never lose the principal invested money, but it is not so simple.

Due to inflation, the purchasing power of your money goes down. So if during a period of 5% inflation you have kept your money in a CPF giving you 2.5% interest, are you growing your money or merely minimising your loss? If you keep majority of your money in an FD or a CPF for long term, you’ll lose money instead of growing it.

We recommend investing in the stock market, even if you do it passively. It has been proven that even if you do it passively, your investments would grow faster than the inflation.

22nd September 2017

How will higher interest rates announced by the Federal Reserve affect Singaporeans?

The Federal Reserve recently announced its decision to increase interest rates for the very first time this year, with its impact certain to affect the financial scenario of several countries across the globe.

While it definitely evinces signs of an American economy making a steady recovery, its effect on Asian economies are going to be somewhat mixed. Earlier last year, the American Federal Reserve increased its benchmark federal fund rates. The federal fund rate is the rate at which commercial banks lend to each other on an overnight basis.

These rates are certain to affect the way credit products in the form of loans and credit cards function in the US. With higher interest rates, the first since the 2008 crisis, will send ripples across the Singapore economy as well.

Higher interest rates will indirectly affect investments in Singapore. The Singapore Interbank Offered Rate is highly influenced with interest rates in the US. So, typically, higher interest rates will affect the SIBOR, making mortgage loans and big loans more expensive to Singaporeans in the near-run.

Companies and corporates will be affected as they will have to spend more to post better growth figures in order to pay for increased cost of borrowings owing to an increase in rates. On the bright side, borrowing can increase in the near-run to fund ambitious growth opportunities, benefiting the economy in the long run.

18th August 2017

Is it possible to claim deposits with no paper records?

What will happen if my bank’s IT system fails and I do not have have hard copies of my account balance? How do I claim the money? Every Singaporean would’ve wondered about this. Banks in Singapore are expected to have procedures to recover data in case the data is lost during some IT infrastructure failure.

If the bank does not have backup of the data and is administered by SDIC (Singapore Deposit Insurance Corporation), the customer does not have to file a claim with SDIC as the bank would’ve provided all the details required to process compensation. The customer can look for announcements on media regarding the compensation.

11th April 2017

Private banks digging into the Asian business potential

With banks such as ABN Amro, ANZ and Barclays leaving Singapore for expansion of business in their home turfs, local companies are gaining traction. Private banks such as DBS Bank and Bank of Singapore (OCBC) are taking over the wealth and investment businesses from the exiting companies and making the most of the opportunities offered by Singapore in particular and Asia in general.

DBS has so far acquired ANZ’s wealth and retail division in Asia, the assets of Bowa Bank in Taiwan, the retail and commercial banking section of Royal Bank of Scotland in China; and Asian private banking business of Societe Generale.

DBS and Bank of Singapore chiefs are positive that the current slowdown in financial markets will wear down and the businesses in Asia will bear fruits in the long term. The banks are looking to create a sustainable wealth management business and adapt the products and services to suit the requirements of Asian customers.